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Abstract:
The correlations among international real estate markets are surprisingly high, given the degree to which they are segmented. While industrial, office and retail properties exist all around the world, they are not economic substitutes because of locational specificity. In addition, the broad securitization of real estate property companies has, until recently, lagged that of other types of companies. Never-the-less, international property returns move together in dramatic fashion. In this paper, we use eleven years of global property returns to explore the factors influencing this co-movement. We attribute a substantial amount of the correlation across world property markets to the effects of changes in GNP, suggesting that real estate is a bet on fundamental economic variables which are correlated across countries. A decomposition shows that a local production factor is more important in some countries than in others.

Abstract:
The correlations among international real estate markets are surprisingly high, given the degree to which they are segmented. While industrial, office and retail properties exist all around the world, they are not economic substitutes because of locational specificity. In addition, the broad securitization of real estate property companies has, until recently, lagged that of other types of companies. Never-the-less, international property returns move together in dramatic fashion. In this paper, we use eleven years of global property returns to explore the factors influencing this co-movement. We attribute a substantial amount of the correlation across world property markets to the effects of changes in GNP, suggesting that real estate is a bet on fundamental economic variables which are correlated across countries. A decomposition shows that a local production factor is more important in some countries than in others.

Abstract:
This paper describes and evaluates the Home Equity Conversion Mortgage (HECM) Insurance Demonstration, designed to encourage the development of private reverse mortgage programs by insuring lenders against the risks associated with new mortgage lending programs and with reverse mortgages in particular. The paper evaluates demand for the program by analyzing the attributes of participating borrowers, their properties and the types of payment options chosen. It also presents several observations regarding participation by the financial community in the HECM demonstration, required counseling and legal and regulatory issues that may hamper the growth and development of reverse mortgage programs in general. The findings suggest strong demand for reverse mortgages among "house-rich, cash- poor" elderly homeowners, either to supplement inadequate current incomes or to provide a reserve against unexpected lump-sum expenses. The flexible design of the HECM program addresses a wide variety of borrower financial needs, even though it imposes higher costs on lenders and servicers. The continued growth of the program, however, is hindered by a shortage of qualified housing counselors in some areas, as well as by a variety of legal and regulatory barriers.

Abstract:
We extend the literature on the impact of externalities using an approach based on a hybrid of hedonic and repeat-sales methods. The externality in question is groundwater contamination in Scottsdale, Arizona. The use of condominium sales allows us to assume that major physical characteristics remain unchanged, but location parameters may be altered by urban growth and development as well as contamination. We find an economically significant discount for properties located in the contaminated area. Interestingly, it does not appear until several years after the contamination becomes publicly known, and it seems to have disappeared before the end of the study period.

Abstract:
Books Reviewed:

Michael L. Lahr and Ronald E. Miller (eds.), Regional Science Perspectives in Economic Analysis: A Festschrift in Memory of Benjamin H. Stevens

Graham Clarke and Moss Madden (eds.), Regional Science in Business

Luis Suarez-Villa, Invention and the Rise of Technocapitalism

Sam Bass Warner, Jr., Greater Boston: Adapting Regional Traditions to the Present

Jameson W. Doig, Empire on the Hudson: Entrepreneurial Vision and Political Power at the Port of New York Authority

Alex Hirschfield and Kate Bowers (eds.), Mapping and Analysing Crime Data: Lessons from Research and Practice

Aura Reggiani and Daniele Fabbri (eds.), Network Developments in Economic Spatial Systems: New Perspectives

Joseph Persky and Wim Wiewel, When Corporations Leave Town: The Costs and Benefits of Metropolitan Job Sprawl

Koichi Mera and Bertrand Renaud (eds.), Asia's Financial Crisis and the Role of Real Estate

Massimo Livi Bacci, The Population of Europe: A History

Byron A. Miller, Geography and Social Movements: Comparing Antinuclear Activism in the Boston Area

Rosalind Greenstein and Wim Wiewel (eds.), Urban-Suburban Interdependencies

Heather Nicol and Greg Halseth (eds.), (Re)Development at the Urban Edge: Reflections on the Canadian Experience

Marco Verweij, Transboundary Environmental Problems and Cultural Theory: The Protection of the Rhine and the Great Lakes

Jonathan Raper, Multidimensional Geographic Information Science

Abstract:
This research reports results from a competition on modeling spatial and temporal components of house prices. A large, well-documented database was prepared and made available to anyone wishing to join the competition. To prevent data snooping, out-of-sample observations were withheld; they were deposited with one individual who did not enter the competition, but had the responsibility of calculating out-of-sample statistics for results submitted by the others. The competition turned into a cooperative effort, resulting in enhancements to previous methods including: a localized version of Dubin's kriging model, a kriging version of Clapp's local regression model, and a local application of Case's earlier work on dividing a geographic housing market into districts. The results indicate the importance of nearest neighbor transactions for out-of-sample predictions: spatial trend analysis and census tract variables do not perform nearly as well as neighboring residuals.

kriging, out of sample prediction, data snooping, local polynomial regression, smoothing regressions, semiparametric models, cluster analysis, nearest neighbors, hedonic models